Luring Horses To Va

Localities Offer Millions In Incentives For Track

October 24, 1993|By BENTLEY BOYD Daily Press

To keep pace in the race, New Kent came up with its own package, worth about $29 million. It includes $22 million in bonds that may cost its track developers more in interest payments but will not cost its taxpayers if the track fails.

The New Kent Public Recreation Authority being formed this fall would own the track for 20 years and lease it to the developer who wins the track license from the state. The lease payments would repay the bonds.

The offer is a large part of the financing of two of the developers interested in New Kent. Covington dentist Jeffrey Taylor would use $14.2 million of the bonds to finance his $30 million project, and Ohio track owner Arnold Stansley plans to use about $20 million to fund his $31 million track.

If the track fails, the investors who purchased the bonds would have dibs on all revenues at the park and the park mortgage. Because the security is the track, and not county taxes, the New Kent bonds would probably carry a higher interest rate on their debt service than the Virginia Beach and Portsmouth bonds, Herbert said.

"While the New Kent bonds may not affect the taxpayers, it may cost the applicant more and, in turn, jeopardize their long-term financial stability," he said.

The only problem for the three cities is finding people willing to invest in their bonds.

"It took the Alabama track two years to get financing," said Shumake.

"These deals take a long time to put together, and the return is so low. It's just not attractive."

Almost as important as the flow of money is the flow of water. The Virginia Beach and New Kent sites would use wellwater, but they are in groundwater management areas - seas of red tape where the state has decided to recertify all wells.

New Kent has approval to pump 1.2 million gallons a day from an unused well near the track site. Churchill has not dug a well yet. State law says existing wells get preference, said Terry Wagner, a manager in the water division of the state Department of Environmental Quality.

He said of New Kent, "They can stand up in good faith and say: `We have a legal document that lets us draw water,' " and of Churchill: "They have no ability to draw water."

But Wagner said his department may have to quickly consider an application from one of horse racing's biggest names.

"There's a great deal of social, economic and political pressure to consider that application," he said.

The Portsmouth site is also in a groundwater management area, but because it has the low-income housing from World War II on it, the site already has city sewer and water service, Herbert said.

"The fact that the development is there means most of the infrastructure is already in place," Herbert said.

Beyond all of this community competition, in the middle of Virginia's horsebreeding region, Wilson is planning to build a track with no help at all from Prince William County. He plans to pay every penny of his track's $45 million infrastructure and construction costs.

"We're not asking for a handout from the taxpayers," said Wilson spokesman Greg TenEyck.

COMMUNITIES ANTE UP

Local governments' offerings in the race for Virginia'a only horse track:

NEW KENT COUNTY:

* Money: County would form an authority to offer up to $22 million in bonds to pay for construction; if track fails, investors get the track, not taxpayer money.

* Roads: County would pay $1 million to widen Route 155, using track property taxes and a 25-cent admissions tax at the track; traffic impact study is done.

* Water: Taxes on property owner Chesapeake Corp. would pay for water line.

* Sewer: Taxes on Chesapeake would pay for treatment facility.

* Environment: Chesapeake paid for a study that showed two acres of wetlands needing a "routine" permit to build.

* Zoning: Needs a conditional use permit.

VIRGINIA BEACH:

* Money: City would guarantee $17.5 million in bonds and spend $4 million on utility infrastructure, marketing and a summertime trolley service.

* Roads: City would spend $1.6 million to widen a road and build turn lanes; track developer Churchill Downs would pay for a traffic study if it gets track license.

* Water: Churchill needs state permit to drill wells until city gets Lake Gaston pipeline out of litigation and on-line.

* Sewer: City would spend $580,000 to build a pumping station.

* Environment: Churchill did a study that showed less than an acre of wetlands.

* Zoning: City has approved conditional use permit.

PORTSMOUTH:

* Money : City would back up to $38 million in bonds and $15 million in land purchases; bonds would be repaid by track developer Virginia Racing Associates, but city must repay if track fails.

* Roads: No cost, because roads need little improvement.

* Water: No cost, because city has water lines to site.

* Sewer: No cost, because city has sewer lines to site.

* Environment: Study showed no wetlands or underground tanks, but city must remove asbestos shingles from low-income homes.

* Zoning: City rezoned the land Sept. 28.

PRINCE WILLIAM COUNTY

* Money: $45 million track would be privately financed by Middleburg developer James Wilson.

* Roads: Wilson would spend $907,000 for road improvements, but Federal Highway Administration may need to approve changes to an exit ramp from Interstate 66.

* Water: Wilson would spend $1.6 million to drill three wells that need no state permit.

* Sewer: Wilson would spend $1.8 million to build system.

* Environment: Wilson did an environmental "review," but not a formal study.

* Permits: Prince William County Board of Supervisors will hear Wilson's special use permit application Nov. 23.